Consumer-centricity in retailing is often cloaked in words about putting the consumer at the center of our business, but what will happen when consumers are the focal point of their own business?
The use of social media changes the dynamic and puts consumers at the core of their own brand. Bad customer experiences, often the exception, used to be isolated incidents. With activist consumers and social media, an isolated incident can easily become a viral and transparent issue — giving others the perception that the exception is the rule.
We need to have clear escalation processes in place to try to not only minimize the downside impact of a bad experience, but more importantly to determine how to best recover and turn it into a positive outcome.
However, we should not just look at responding to social media as a defensive play. It is also an opportunity to engage customers and their social circles to help them meet their needs and deepen their relationships with each other, not just with the brand they are discussing or following. Most importantly, social media provides a rich set of customer sentiment and customer perceptions that can be tapped to make even more powerful business decisions.
Several disruptive elements related to social media will impact how chain drug stores engage with customers in the future. In addition to enhanced digital marketing and social commerce opportunities, below are several that will likely have a big impact on future interactions and operations.
• Real-time dashboards driven by customers: Imagine if customers were to start sharing information regarding wait times at pharmacies and clinics, and that information linked to existing crowdsourced map and traffic data from sites such as Google and Waze. Customers would be routed to a particular store based not just on driving time but on total time taken to complete the task at hand. At the same time, this sharing of information creates a situation in which operations that are not effective may become more and more transparent to customers and become an even greater part of their decision-making process.
On the upside, this transparency has the potential to reduce the burden and impact of poor staffing forecasts and demand planning, as traffic will naturally redirect to stores that have more capacity. Link this type of information with instant feedback (“social currency”) such as that found on Uber (where drivers and passengers rate each other) and you can imagine how more and more customer-driven “dashboard” data becomes available as part of the decision-making process.
• Gamification becomes real business: Games and contests aren’t just for fun anymore. They are amazing ways to enable customers to share and connect with each other. Brands such as Bang & Olufson, Neiman Marcus and Barneys have used contests and games to create connections with customers — and across customers. This also puts content creation more in the hands of the customer, rather than from the brand out to the customer.
• New ways of “listening” to customers: Customer sentiment will continue to be a more visible and sought-after metric in determining a brand’s overall connection with its customers. While traditional metrics like Net Promoter Score (NPS) have gotten traction, real-time social media channels can enable chain drug stores to measure satisfaction more accurately and effectively than ever before. Perhaps NPS evolves into a new metric like a “pulse score” that truly captures real-time sentiment, rather than just a post-purchase recommendation indicator.
While applying these factors today can present a source of competitive advantage, tomorrow they will likely be table-stakes. Taking the approach of “thinking big, starting small and scaling appropriately” is a helpful way of thinking about how to further harness the fun world of social interactions.
We envision that leading companies will ask themselves key questions as they shape their overall and social strategies.
• Are we able to action our insights gleaned from social? Leaders will be able to link key operations to social feedback and sentiment. Operational failings in the value chain will manifest as customer complaints increase on social media. Reconciling poor operational performance to customer impact will reveal areas that drive internal efficiency and directly impact customer retention and acquisition.
Social media platforms such as Twitter will continue to be crucial for brand amplifications, marketing and merchandising, but leaders will be able to leverage customer feedback and sentiment to allow them to quickly detect and respond to what customers are saying about them — not just what they are telling them directly.
• Who is our “employee of the future?” Large chains employ hundreds of thousands of people who are the face and attitude of their brand. That’s a lot of screening, hiring, training and performance managing. What if your “best” employee in the future is not actually someone you truly “employ?”
Brand ambassadors or evangelists — advocates who successfully navigate social media — have been found to effectively play a role in amplifying and supporting other customers to help them in solving their problems. No doubt companies will need to have their own employees to help monitor and interact in the social domain, and enabling the crowd in this way will not only drive loyalty among this elite following but will foster trust and create new relationships with current and prospective customers alike.
• How can we connect physical and digital? Customers are armed with the tool that cuts across channels and interactions: mobile devices and, in particular, smartphones. Customers active on social sites will be scanning, sharing and evaluating feedback to help them in their shopping journey.
Along the same lines as the “employee of the future” referenced above, some retailers — such as Nordstrom, Lowe’s and Sephora — are embracing this connection across physical and digital by using such sites as Pinterest to highlight customer recommendations and “pins.” Nordstrom even dedicates space in stores to highlight items that are pinned. Now, all 117 Nordstrom stores feature top-pinned signs on merchandise in women’s shoes and handbags, two of the most pinned categories from Nordstrom.com. They have armed their salespeople with an internal iPad app that lets them view the most popular pins and match those items with inventory levels by store and department.
Navigating the interconnected, digital world of customers and brands is not easy. Defining and executing successful customer interactions requires a clear vision and customer-centric strategy — as well as extensive analytic and customer management capabilities. No business should attempt to interact in a “be everything to everyone” manner without this discipline and understanding.
Attacking these opportunities with a PACTS mind-set — personalized, accurate, collaborative, timely and appropriately self-served — will allow chain drug stores to effectively focus on customer segments and journeys and develop interactions that are meaningful and effective for both their customers and their organization.
ADAM PRESSMAN ([email protected]) is a partner in A.T. Kearney’s Strategic IT Practice and is based in Chicago. A consultant in A.T. Kearney’s Strategic IT Practice, JOSHUA SWARTZ ([email protected]) is based in New York.